Madhucon-Sino Hydro JV, Rep. by its Authorized Signatory v. Government of Andhra Pradesh Rep. by its Principal Secretary
2012-07-31
C.V.NAGARJUNA REDDY
body2012
DigiLaw.ai
Judgment : These Writ Petitions are filed by three bidders who filed their tenders for a project by name “Indira Sagar Polavaram Project” (ISPP) which was proposed to be constructed at an estimated cost of Rs.4717/-crores on an EPC-Turn Key basis. As per the procedure envisaged in the tender conditions, the bids shall be in two parts, namely, technical bid and price bid. The technical bids of six bidders were opened on 5-7-2012, including that of the three petitioners herein and M/s. Soma-CGGC JV, impleaded as respondent No.3 in W.P.No.22664/2012 and respondent No.5 in W.P.No.23047/2012. The petitioners, on coming to know that their technical bids were rejected, filed these Writ Petitions assailing the disqualification of their technical bids mainly on the ground that no reasons have been assigned by the State Government and its officials involved in the evaluation of the bids for disqualifying their technical bids. When these Writ Petitions came up for hearing, the learned Government Pleader for Irrigation and Command Area Development, on oral instructions, submitted that the decision of the Engineer-in-Chief to reject the technical bids of the petitioners has not attained finality as the same will be examined finally by the State Government which is the bid accepting authority and that thereafter the reasons therefor will be communicated to the petitioners. On his request, these cases were adjourned to enable him to file an affidavit to the above said effect. Today, Mr. Shailendra Kumar Joshi, the Principal Secretary to the Government of Andhra Pradesh, Irrigation and Command Area Development Department, filed a common counter-affidavit wherein it is inter alia stated that the State Level Standing Committee (SLSC) examined the evaluation of technical bids and gave its decision on 20-7-2012 to open price bids of the two qualified bidders only as the remaining four bidders failed to fulfill the basic eligibility requirement stipulated in the bid document. It is further stated that as per the decision of the SLSC, the price bids of the two qualified bidders which were opened as mentioned above, were made available in e-Procurement website which is accessible to all the bidders.
It is further stated that as per the decision of the SLSC, the price bids of the two qualified bidders which were opened as mentioned above, were made available in e-Procurement website which is accessible to all the bidders. The counter-affidavit further stated that a comprehensive evaluation report of the total tender process will be prepared by the Engineer-in-Chief, ISPP, Dowlaiswaram, who is the bid inviting authority of the present tenders and submitted to the bid accepting authority i.e., the Government, for its consideration; that these proposals will be placed before the High Power Committee (HPC) chaired by the Chief Secretary to the Government and that based on the recommendations of the HPC, the bid accepting authority will examine the proposals and a final decision on the tenders will be taken. The learned Senior Counsel appearing for the petitioners have argued that since the bids are stated to be under consideration before the bid accepting authority, it would be appropriate if the reasons on which the Engineer-in-Chief and the SLSC rejected the petitioners’ technical bids are communicated to them to enable them to submit their clarifications to the bid accepting authority to facilitate to arrive at a proper decision. At the hearing, elaborate submissions were made on the true purport of condition Nos.25 and 26 of the Instructions to Bidders (ITB). These conditions are reproduced hereunder: 25.1: The Technical Bids will be opened online by the Engineer-in-Chief, ISPP unit, Dowlaiswaram or on his behalf the Superintending Engineer, ISHW Circle, Dowlaiswaram at the time and date as specified in the Bid Documents. All the statements, documents, certificates, DD/BG etc., uploaded by the Bidders will be verified and downloaded, for technical evaluation. The clarifications, particulars, if any, required from thse Bidders, will be obtained either online or in the conventional method by addressing the Bidders. The Technical Bids will be evaluated against the specified parameters/criteria, and the technically qualified bidders will be identified. The result of Technical Bid evaluation will be displayed on the ‘e’ market place, which can be seen by all the bidders who participated in the Bid.
The Technical Bids will be evaluated against the specified parameters/criteria, and the technically qualified bidders will be identified. The result of Technical Bid evaluation will be displayed on the ‘e’ market place, which can be seen by all the bidders who participated in the Bid. 25.2: Similarly, at the specified date and time, the price bids of all the technically qualified bidders will be opened online by the Engineer-in-Chief, ISPP unit, Dowlaiswaram or on his behalf the Superintending Engineer, ISHW Circle, Dowlaiswaram and the result will be displayed on the ‘e’ market place which can be seen by all the bidders who participated in the tenders. Till the technical bids are opened, the identity of the bidders who participated in the tenders is to be kept confidential. Similarly, till the price bids are opened, the Bid offers are to be kept confidential. 26.1: The Engineer-in-Chief will evaluate and process the Bids and submit to the committee constituted for the purpose. The committee will examine the bids and decides the successful Bidder and communicates its recommendation to the Engineer-in-Chief, Indira Sagar Polavaram Project, Dowlaiswaram. The Engineer-in-Chief will forward the recommendations of the Committee to the Government for deciding the successful Bidder. 26.2: Bids shall be scrutinized in accordance with the conditions stipulated in the Bid Document. In case of any discrepancy or non-adherence of conditions the Bid Accepting Authority shall communicate the same, which will be binding both on the Bid Opening Authority and the Bidder. In case of any ambiguity, the decision taken by the Bid Accepting Authority on Bids shall be final. Though the learned counsel appearing for the parties have placed different interpretations on these clauses, in my opinion, the procedure prescribed by the said clauses authorizes the bid inviting authority or on his behalf the Superintending Engineer, ISHW Circle, Dowlaiswaram, to first open the technical bids, make evaluation of the bids after obtaining clarifications, particulars, if any required from the bidders, identify the technically qualified bidders and display the result of the technical bid evaluation on the ‘e’ market place for the information of the bidders. Thereafter, the said authority or on his behalf the Superintending Engineer, ISHW Circle, Dowlaiswaram, will open the price bids of all the technically qualified bidders and the result will be displayed on the ‘e’ market place for information of all the bidders.
Thereafter, the said authority or on his behalf the Superintending Engineer, ISHW Circle, Dowlaiswaram, will open the price bids of all the technically qualified bidders and the result will be displayed on the ‘e’ market place for information of all the bidders. Till the technical bids are opened, the identity of the bidders participated in the tenders will be kept confidential and till the price bids are opened, the bid offers are to be kept confidential. Thereafter, the bid inviting authority will evaluate and process the price bids and submit the same to the committee constituted for the purpose. The committee will examine the bids and decides the successful bidder and communicates its recommendation to the bid inviting authority who in turn will forward the recommendations to the bid accepting authority. The bids will then be scrutinized by the bid accepting authority and in case of any discrepancy or non-adherence to the conditions, the said authority will communicate the same, which will be binding on both the bid opening authority and the bidder. As noted hereinbefore, the respondents have come out with the plea that the procedure prescribed under clauses 25 and 26 of the ITB is being scrupulously followed and that the evaluation undertaken by the bid inviting authority and as accepted by the SLSC will be considered by the HPC and the bid accepting authority will take a final decision on the recommendations of the HPC. On this premise, the respondents have pleaded that the scope of consideration by the bid accepting authority includes examination of decision of the bid inviting authority and the opinion of the SLSC on the rejection of the technical bids of all the bidders including the petitioners and that a final decision in this regard will be taken after the HPC’s recommendations are submitted to the bid accepting authority. All the learned counsel representing the petitioners are critical of the method and manner in which their technical bids are evaluated by the bid accepting authority.
All the learned counsel representing the petitioners are critical of the method and manner in which their technical bids are evaluated by the bid accepting authority. Sri D. Prakash Reddy, learned Senior Counsel has invited this Court’s attention to letter dated 19-7-2012 of the bid accepting authority under which he has requested the petitioner in W.P.No.22664/2012 to give an undertaking by the Authorized Signatory to commit itself to the bid in view of certain deviations suggested by the latter to the provisions of the bid document and also to the reply given on the same day by the petitioner’s representative wherein an undertaking as required was given. He submitted that having taken such an undertaking, without any further communication, the petitioner’s technical bid was rejected. He has further submitted that if the technical bid of the petitioner was not in conformity with the tender conditions, there would have been no question of the bid inviting authority requiring the undertaking from the petitioner just a day before opening of the technical bids. Sri S. Niranjan Reddy, learned counsel for the petitioner in W.P.No.22680/2012 has also submitted that there is absolute lack of transparency in the method in which the bid inviting authority has considered the technical bids. He submitted that there was absolutely no need for the bid inviting authority to maintain secrecy, at least after he has arrived at the decision to reject the petitioner’s technical bid. While arguing that while doing public acts there is absolutely no need for the Government functionaries to maintain secrecy, the learned counsel placed reliance on paragraph-74 of the Judgment in State of U.P. Vs. Raj Narain and others (1975) 4 SCC 428 wherein the Supreme Court held at paragraph-74 as under: “In a government of responsibility like ours, where all the agents of the public must be responsible for their conduct, there can be but few secrets. The people of this country have a right to know every public act, everything that is done in a public way, by their public functionaries. They are entitled to know the particulars of every public transaction in all its bearing. The right to know, which is derived from the concept of freedom of speech, though not absolute, is a factor which can, at any rate, have no repercussion on public security (See: New York Times Co. v. United States – 29 L Ed.
They are entitled to know the particulars of every public transaction in all its bearing. The right to know, which is derived from the concept of freedom of speech, though not absolute, is a factor which can, at any rate, have no repercussion on public security (See: New York Times Co. v. United States – 29 L Ed. 822: 403 US 713). To cover with veil of secrecy, the common routine business, is not in the interest of the public. Such secrecy can seldom be legitimately desired. It is generally desired for the purpose of parties and politics or personal self-interest or bureaucratic routine. The responsibility of officials to explain and to justify their acts is the chief safeguard against oppression and corruption: Whether it is the relations of the Treasury to the Stock Exchange, or the dealings of the Interior Department with public lands, the facts must constitutionally be demandable, sooner or later, on the floor of Congress. To concede to them a sacrosanct secrecy in a court of justice is to attribute to them a character which for other purposes is never maintained – a character which appears to have been advanced only when it happens to have served some undisclosed interest to obstruct investigation into facts which might reveal a liability (See: “Wigmore on Evidence”, 3rd Ed., Vol.8, p.790). To justify a privilege, secrecy must be indispensable to induce freedom of official communication or efficiency in the transaction of official business and it must be further a secrecy which has remained or would have remained inviolable but for the compulsory disclosure. In how many transactions of official business is there ordinarily such a secrecy? If there arises at any time a genuine instance of such otherwise inviolate secrecy, let the necessity of maintaining it be determined on its merits.” Having regard to the procedure prescribed under Clauses 25 and 26 of the ITB and the stand taken by the State Government that the evaluation so far done is under consideration of the bid accepting authority, it would be premature for the petitioners to insist on communication of the reasons for rejection of their technical bids. The cause of action for the petitioners to demand for communication of reasons would arise when a final decision is taken regarding their technical bids.
The cause of action for the petitioners to demand for communication of reasons would arise when a final decision is taken regarding their technical bids. Therefore, it is not appropriate to direct the Government to communicate the reasons for rejection of the technical bids of the petitioners at this stage when a final decision has not yet been taken on the qualification of the petitioners’ technical bids. It is not the first time that the tender process relating to this Project is embroiled in controversy. Even on the earlier occasion, some of the unsuccessful tenderers have questioned the tender process and eventually, the tender process became abortive. Caesar’s wife must always be above suspicion. The Executive Government in a Democracy should always function in the manner which does not give scope for any suspicion, more so while dealing with a Project of this magnitude. The Project is evidently conceived with an avowed object of irrigating lakhs of acres of barren land by diverting surplus water which would otherwise go waste by joining the sea. Delays in grounding and completing the Project would lead to cost escalation apart from delaying the fruits of the Project to scores of people at large. An onerous duty is therefore cast on the State Government to ensure that the Project is taken up in the right earnest and completed at the earliest. It shall therefore make an endeavour to see that needless litigation is avoided by examining the tenders in a most objective manner while keeping in mind that public interest takes precedence over individual interests. The HPC is chaired by an officer of no less a rank than that of the Chief Secretary to the Government. This Court has therefore no doubt that the HPC will take an objective view on the aspect of technical bids of all the bidders, including that of the petitioners, and make its recommendations on examining whether the opinion of the Engineer-in-Chief and the SLSC are in accordance with the ITB and other bid conditions.
This Court has therefore no doubt that the HPC will take an objective view on the aspect of technical bids of all the bidders, including that of the petitioners, and make its recommendations on examining whether the opinion of the Engineer-in-Chief and the SLSC are in accordance with the ITB and other bid conditions. For the reasons aforementioned, the Writ Petitions are disposed of in the following terms: (i) Respondent No.1 shall take a final decision on the technical bids of the petitioners and communicate the result along with the reasons therefor to the petitioners immediately on taking such decision; and (ii) until a decision as mentioned in (i) supra is communicated to the petitioners, the price bids shall not be evaluated and finalized and the contract shall not be awarded to the successful bidder. As a sequel, WPMP Nos.29002/2012, 29024/2012 and 29433/2012 filed in the respective Writ Petitions for interim relief are disposed of as in fructuous.